All Forum Posts by: Ron S.

Quote from @David B.:

Quote from @Chris Seveney:

Quote from @David B.:

Hello,

Purchased a property from the county auction, comes to find out i paid off the HOA foreclosure. there was a mortgage attached. I am in talks with the lender (Wells Fargo) to satisfy this payment. If i satisfy it, will the second lien clear? or will it still be there?

Supposedly the second lien holder is a credit card debt collector, they were listed as the defendant in the foreclosure case.

 Curious as to why you did not run a title search? Also how much is the first mortgage and is the property even worth keeping?

 I didnt do my DD. BIG rookie mistake and lesson learned. 

Paid 100k for it. Whats owed is 150k (mortgage and fees). property is worth 185/200. 

If i satisfied the mortgage, there would be another 40k lien i would have to satisfy so its not worth to buy it directly from the bank.  BUT if i let it go up for auction, and no one bids against me, i can get it clear title for 150k.

Whats your thoughts?

 if you let it go to auction by the 2nd lien holder, you get wiped out.

Quote from @Rigoberto Marquez:

regarding AB 2424, how would they determine fair market value? BPO or a desktop appraisal? 

 either...or even a 2055 drive by appraisal.

In my opinion, the first step is understanding the vernacular more so than where to look. I think this is generally a good post but, a couple of subjects warrant comment (opinion...which yes, I know how valuable anyone's opinion may or may not be).

* In my world (Bank) a "Foreclosure" is a property/loan that has a filed notice (Often referred to as first legal) that a foreclosure has commenced and is somewhere in the foreclosure process between first legal and sale (or post sale redemption).

*In my world, a "Pre-foreclosure" is a property or loan where the first legal has not been filed. It is delinquent enough (Greater than 90 days but below 120 days(can't file first legal until after the 120th day by federal rule (Except under very very specific circumstances)) to where the lender or servicer has sent the breach letter (Notice of pending foreclosure) with an expiration date that the loan will be referred to a foreclosure filing (Trustee/attorney) if the borrower(s) don't cure the breach within that defined period of time.

* A notice of default is not a letter sent by a creditor saying they are late. It is actually the legal filing that there is a recorded foreclosure process that has already started, after the expiration of the letter that was sent informing of the lates and consequences of no action.

* lis pendens is not just a note but a recorded cloud on title that there is pending litigation. Lis pendens are not typical in trustee states because trustee states use the power of sale clause to foreclose, and don't use the courts.

*Online Directories are only available for or useful for loans/borrowers in an active foreclosure where there has been a public filing in court or the recorder's office. Delinquent loans under 120 days, are not public information for anyone.

*Asset Managers manage foreclosed (past tense), not foreclosure (Pending sale/auction) properties. Those are called "REO"(Real Estate Owned) (as you pointed out), not foreclosures.

*Short sales don't exist today. 2016? Sure. 2024? Maybe in Jersey but nowhere else (I'm being somewhat sarcastic about Jersey). Short sales are where the bank would realize a lesser loss settling than they would completing a foreclosure. It's usually a financial distress but not always. For example, a soldier changing duty station could do a short sale without any hardship whatsoever. Short sales by design are listed on MLS (always and always are arms length) and not below value, or the lender would more than likely decline any short sale offer.

*Banks don't list foreclosure listings on their websites. REO properties? You bet, but not active or pre-foreclosure.

*Real Estate attorneys are a waste of time if you are looking for foreclosures. Using one to go under contract is fine but using (networking) one to find a foreclosure? Highly unlikely except in a probate or estate type of scenario.

*Auction Houses are good for finding active foreclosures and REOs (Bank owned). If you agree with my definition (I'm not insisting you do) of "pre foreclosure", you wouldn't find pre-foreclosures at an auction house.

*Neighborhood drive bys could get you shot. Drive slow up/down the wrong street looking like you aren't from there could get the cops called on your or worse. You won't see a notice for a preforeclosure. Any required notice would be removed quickly (usually) if occupied. 

I highly recommend against this tactic as you are going to swing a bat at a hornets nest or worse, knocking on their door. You may also run afoul of local/state laws against people that contact people in foreclosure to buy their home.

*Wholesalers are often people that don't have the financial wherewithal to do the deal themselves, so they try to get others to help and call themselves wholesalers. Yes, I know there are legitimate wholesalers but just like used car salesmen (women), the bad ones make the good ones seem just as bad. They don't usually stop foreclosures and usually blow things up instead.

Quote from @Alissa Wylie:

Thanks Ron from the reply.  Have you used Auction.com to purchase?  I would love to talk to someone who personally used it just wanting to confirm its legit and all that. 

 Auction.com is legit. They suck but they are legit. I've used them to sell. I'm not a purchaser, I'm a lender that initiates and hold foreclosures.

Their website is pretty thorough as to the process. California has a couple of additional hoops post foreclosure sale, if its a real foreclosure sale but its still pretty standard.

You would have to have the owner of the property file a motion for a hearing with the creditor and bankruptcy trustee, to get permission to sell the property, essentially removing it from the umbrella of the bankruptcy. It would have to be in the best interest of the creditors in order for that to happen (get approved).

You would also have to pay the lender that put the loan into foreclosure, in full, or face their objection in the hearing.

The attorney we use charges $800 for uncontested and $1,500 if contested. it's not wise to look for an inexpensive attorney when its hundreds of thousands of dollars at play. Bite the bullet and spend the money and use someone that specializes in the nuances and intricacies of evictions, especially in Commiefornia. 

I've got one property I foreclosed on in 2019. I'm still in court with the previous owner.

Quote from @Elaine Goepfert:

Quote from @Ron S.:

Quote from @Jay Hinrichs:

Quote from @Ron S.:

Quote from @Henry Lazerow:

Congrats on getting them to accept deed in liu will save your credit! Another option I thought of was pulling from your retirement funds if that can make up the LTV. You are in a solid market that should appreciate over the long term.

 A DIL does not save your credit. It shows as an amount settled for less than full amount due. While its not as bad as a foreclosure, it's bad.

Kiavi might not report to fico ?  

 True...if they don't report to the bureaus. No credit to damage...or to save.

 Is there a way to find out?  Are you saying if they don't report to credit bureaus you might as well go through foreclosure?  I thought the entire point of a deed in lieu is to save your credit?  Now I'm second guessing if this is the correct move.  They are mailing me the papers now, I'd love some guidance if anyone has any on what to do.

I explain a DIL vs. Foreclosure like this, in either event, you are losing a limb (proverbially speaking of course), its just that with a DIL, its a below the knee amputation versus an above the knee amputation as it relates to the hit to your credit. If its not being reported to the bureaus then the only thing you have to concern yourself with is (As Jay points out) any potential deficiency you may be on the hook for. the actual physical processing of a DIL is very similar to a foreclosure in that there is title work, recording of documents, etc. There just isn't a lawsuit or publication of events.

I don't know what state you are in but some states require the bureaus to give consumers a free credit report once a year. Even if it wasn't free, you could go to Transunion.com, Experian.com, Equifax.com etc. and order your report to see what's being reported. Again, if its not being reported that's great for your credit but cover yourself for any balance that may be owed by ensuring its not in the documents for the DIL.

Quote from @Joseph Agins:

Loan Commitment states:

 "There is a prepayment penalty of 1% on the loan for any partial or full principal reduction payments made before the end of the fifth year. After the fifth year the loan can be paid off with no prepayment penalty."

So, would the PPP trigger for simply paying a little extra on monthly payments?  I need to confirm with the lender but assume any such "partial" payments would have to be substantial and equal to at least 10-20% or more of the total loan?

It will state clearly in the note what a partial prepay is that would trigger the fee. Some lenders say anything beyond the billed amount. Some allow 10-20%. Some require a pre approval before any principal curtailment. Its always spelled out in the note. If its not, it would not be enforceable.

Don't listen to anyone that says a prepay fee is only triggered when the note is called due through a refinance or sale. They are incorrect and if you follow their advice, be sure to hit them up for the fee when the lender charges you.

Quote from @Jay Hinrichs:

Quote from @Ron S.:

Quote from @Henry Lazerow:

Congrats on getting them to accept deed in liu will save your credit! Another option I thought of was pulling from your retirement funds if that can make up the LTV. You are in a solid market that should appreciate over the long term.

 A DIL does not save your credit. It shows as an amount settled for less than full amount due. While its not as bad as a foreclosure, it's bad.

Kiavi might not report to fico ?  

 True...if they don't report to the bureaus. No credit to damage...or to save.